Fitch Affirms PNC; Places Riggs on Rating Watch Positive.

CHICAGO -- Fitch Ratings affirms all ratings of PNC Financial Services Group, Inc. (PNC) and its affiliates. At the same time, Fitch has removed ratings of Riggs National Corporation (Riggs) and its affiliates from Rating Watch Negative and has placed them on Rating Watch Positive. These actions follow PNC's announcement earlier today that it has reached a definitive agreement to purchase Riggs for approximately $779 million in stock and cash. The ratings of Riggs and its affiliates will likely be aligned with PNC's ratings when the transaction is consummated.

The acquisition includes both bank and holding company assets, and is expected to close in early 2005 after regulatory and shareholder approvals have been received. A complete list of ratings follows at the end of this release.

The transaction fits well into PNC's retail banking and asset management business model. The acquisition will enable PNC to expand into the high-growth metropolitan Washington D.C. market. Fitch believes that Riggs' deposit franchise is intact and has not been seriously damaged by the company's recent regulatory problems. PNC plans to expand beyond this branch base by adding approximately 30 branches in the Maryland and Virginia portions of this market over the next few years. On the asset management side, Riggs will add approximately $3 billion to Assets under Management after certain business lines have been divested.

The transaction poses certain challenges for PNC. Riggs is currently under regulatory supervision for irregularities in its embassy banking business. PNC plans to exit or drastically reduce this business, and expects regulatory issues to be resolved before the transaction closes. Other challenges include Riggs' weak earnings capacity, its low fee income base, and the strongly competitive nature of the D.C. market. PNC will also need to achieve significant cost saves in excess of its investment in new branches. Also, capital will be reduced slightly by this transaction due to the creation of additional goodwill. Finally, the deal poses the normal risk of business integration.

Fitch believes PNC should be able to execute on integration and cost saves, and should also be able to improve Riggs' base of fee income. Nonetheless, the transaction is expected to be dilutive to earnings per share in 2005 and to reach break even in 2006.

Fitch will monitor regulatory and capital issues carefully. While Fitch believes that the exit of the embassy business should resolve most of these issues, PNC will need to invest in training and compliance systems to prevent future problems. Fitch believes that capital will remain at acceptable levels after this deal closes, given PNC's current rating levels. However, future M&A activity or unexpected expenses could place stress on capital, and Fitch will monitor such trends on an ongoing basis.

Ratings Affirmed, Rating Outlook Stable:

PNC Financial Services Group

-- Long-term Senior 'A';

-- Long-term Subordinated 'A-';

-- Preferred Stock 'A-'

-- Short-term 'F1';

-- Individual 'B/C';

-- Support '5'.

PNC Funding Corp.

-- Long-term Senior 'A';

-- Long-term Subordinated 'A-';

-- Short-term 'F1';

-- Individual `B/C'

-- Support '5'.

PNC Bank N.A.

-- Long-term deposits 'A+';

-- Long-term Senior 'A';

-- Long-term Subordinated 'A-';

-- Short-term Senior 'F1';

-- Short-term Deposits 'F1';

-- Individual 'B/C'

-- Support '4'.

PNC Bank Delaware

-- Long-term deposits 'A+';

-- Long-term Senior 'A';

-- Short-term Senior 'F1';

-- Short-term Deposits 'F1';

-- Individual 'B/C'

-- Support '4'.

PNC Financial Corp.

-- Long-term Subordinated 'A-'.

PNC Capital Trust A

PNC Capital Trust B

PNC Capital Trust C

PNC Capital Trust D

PNC Institutional Capital Trust A

UNB Capital Trust I

-- Trust Preferred 'A-'.

Ratings Placed on Rating Watch Positive:

Riggs National Corporation

-- Long-term senior 'BB-'

-- Subordinated debt 'B+';

-- Short-term debt 'B';

-- Individual 'D';

-- Support '5'.

Riggs Bank National Association

-- Long-term deposits 'BB+';

-- Long-term senior 'BB';

-- Short-term debt 'B';

-- Short-term deposits 'B';

-- Individual 'D'.

-- Support '5'.

Riggs Capital

Riggs Capital II

-- Preferred stock 'B'.